All posts tagged John Paulson

John Paulson took flack for considering a move to Puerto Rico, one that would have cut his tax bill.

Mr. Paulson dropped the idea of a move. But the hedge fund manager seems more determined to help his clients reduce their own tax bills.

On Thursday, Mr. Paulson, who is trying to turn around his hedge-fund firm after a period of difficult trading, sent an invitation to clients and potential clients, announcing the launch of the Paulson Partners Premium L.P. Fund. The invitation said the fund is for investors “looking to mitigate income taxes.”

Deutsche Telekom’s improved bid for MetroPCS Communications Inc. is getting some early traction.

European Pressphoto Agency

Jonathan Chaplin, an analyst at New Street Research who had urged clients who owned MetroPCS shares to vote against the merger with Deutsche Telekom’s US unit, T-Mobile USA, said the new deal was “a step in the right direction.” Mr. Chaplin said in an email that his conversations with investors in recent days suggested Deutsche Telekom now had the support it needed to win approval.

“I am pretty certain the new deal will get through,” Mr. Chaplin said.

Indeed Paulson & Co., which is MetroPCS’s largest shareholder and had argued against the deal, said in a statement it “intends to vote for the merger” now, adding it appreciated the substantial improvement.

Another homebuilder is going public, this time brought to you by John Paulson.

Bloomberg News

The billionaire hedge fund manager, known the world over for shorting the housing market leading into the crisis, has more recently been going long the property market, including buying land and hotel companies.

Among those investments was Newport Beach, Calif.-based William Lyon Homes, which today filed the paperwork to raise $200 million in an initial public offering. Both the company and its investors could sell shares, though the so-called red herring filing doesn’t provide any details on that. It does say the company could use any proceeds it raises for itself to acquire more land.

Hedge fund manager John Paulson and the Paulson Family Foundation pledged a $100 million gift to the Central Park Conservancy Tuesday, the largest gift to any public park and one of the largest to any New York City cultural institution.

“It’s simply impossible to imagine what New york would be without Central Park,” Paulson, founder and president of Paulson & Co., said at a news conference announcing the gift.

A native of Queens, the 56-year-old Paulson attended Harvard Business School and started his company with his personal savings and contributions from family and friends.

Paulson bought a 90-acre ranch home called Hala Ranch in Aspen, Colo., and a nearby 38-acre parcel known as Bear Cabin for a total of $49 million through an entity called Starwood Mountain Ranch LLC.

“Initially offered for sale for $135 million the purchase price represents a substantial discount to the asking price. In addition, the purchase also includes the Bear Cabin located on a separate 38-acre parcel that was never previously offered for sale,” according to a statement issued on behalf of Paulson’s firm, Paulson & Co.

Hala Ranch, with a 56,000 square-foot house, was built by Prince Bandar bin Sultan of Saudi Arabia in 1991 while he was ambassador to the U.S. It was Paulson’s fourth personal investment in real estate. He already owned three other properties: a townhouse in Manhattan, a house in South Hampton, and another property in Aspen.

Caesars should benefit as the hotel and gaming sector, which had declined with the economy, “now is at, I believe, a fulcrum point where earnings are again starting to grow as their sector recovers,” Paulson said at the Ira Sohn Investor conference.

Paulson, who vaulted to fame when he made billions betting against the U.S. housing market before stumbling more recently, said Caesars has potential for growth. Caesars recently added an addition in Las Vegas and has plans to open a new casino in Cleveland, he said, and may add online gaming revenue. “One thing I like about hotels is the rates increase with growth and inflation. There’s a lot of embedded increases in the hotel properties that Caesar’s owns,” he said. The price per share could go as high as $138 per share, he said.

He was also bullish on the stock of mining company AngloGold Ashanti, saying it’s performed poorly over the last several years as it’s failed to correlate as expected with the price of gold. While gold is up 69% over the last three years, he said, shares of AngloGold are down 9% in the same time.

“For me, that represents an opportunity,” Paulson said. “If the earnings are growing but the stocks are falling, that means the stocks are at a better valuation than they were before.”

Paulson also disputed that owning gold ETFs were easier than owning a company.

Hedge fund manager John Paulson’s firm reported stakes in Caesars Entertainment, Viacom and Prestige Brands in the first quarter and reduced stakes of Tenet Healthcare and SunTrust Banks.

Bloomberg News

It also reported a stake of 31.57 million shares in Genon Energy, up from 4.7 million shares reported at the end of the fourth quarter.

The value of Paulson’s fund holdings rose 8.6% in the first quarter, to $15 billion, after a losing streak in 2011 that shaved 52% off the value of his holdings.

The fund company reported a 12.37-million-share stake in Caesars, along with 1 million class B shares of Viacom and 1 million shares of Prestige Brands. It reported holding 2.7 million shares of Tenet Healthcare, down from 10 million in the fourth quarter. The firm also reported 5.6 million shares of SunTrust, down from 11.8 million in the fourth quarter.

After news Wednesday that Hartford Financial will no longer sell variable annuities, hedge-fund manager John Paulson still wants the company to spin off its property-casualty arm.

Bloomberg News

But some former insurance regulators have this message: hold your horses. Former top New Jersey insurance regulator Tom Considine says Hartford can’t make that decision in a vacuum, without regulatory input.

“Sometimes, masters of the universe don’t realize that regulators really do have the ability to say no,” said Considine, who stepped down as commissioner of the New Jersey Department of Banking and Insurance in February.

Spinning off the property-casualty business, and leaving a “less vibrant part behind would be closely scrutinized,” he said, adding: “Approval would be unlikely in this environment.” Paulson & Co., the insurer’s largest shareholder, believes the idea that regulators would stand in the way of a spinoff is a premature assumption to make, people familiar with the matter said.

A spinoff would likely take at least a year to close, and would be judged by regulators on numbers at that time — not on today’s numbers, they say.

“We support today’s actions, not as a conclusion of the strategic review, but as a first step in creating a clear delineation between The Hartford’s P&C and non-P&C businesses.

We are pleased that The Hartford is taking steps to focus on core operations and to divest or discontinue non-core and capital intensive businesses. We believe that putting the variable annuity business in runoff and selling the non-core individual life, retirement plans and broker dealer businesses will raise cash, free up capital, permit deleveraging and increase its financial flexibility. Successful execution of these plans will strengthen the Company’s ability to separate the P&C and non-P&C businesses in the future, which we continue to believe would create the greatest short-term and long-term shareholder value and strengthen the company.

While we appreciate the extensive work of The Hartford’s board and management, we do not believe the positive actions announced today address the main problem with The Hartford’s undervaluation: the lack of interest from P&C analysts and P&C investors in The Hartford’s best-in-class P&C business due to its affiliation with unrelated, low-return and complex businesses. We do not believe today’s actions will materially increase P&C investor interest in The Hartford.”

About Deal Journal

Deal Journal is an up-to-the-minute take on the deals and deal makers that shape the landscape of Wall Street, including mergers and acquisitions, capital-raising, private equity and bankruptcy. In short, wherever money changes hands. Deal Journal is updated throughout each trading day with exclusive commentary, analysis, data, news flashes and profiles. The Wall Street Journal’s David Benoit is the lead writer, with contributions from other Journal reporters and editors. Send news items, comments and questions to deals@wsj.com.

Dealpolitik is Ronald Barusch's strategic look at deals currently making the headlines as well as the major forces at work in the deal-making world. He was a M&A lawyer with Skadden, Arps, Slate, Meagher & Flom for over 30 years. He retired in 2010 after 25 years as a partner at the firm. Click here for his current and archived columns.